Washington: International Monetary Fund has raised concerns over the unemployment rate in India. But it expressed optimism over a range of reforms being carried out in India since the last few years and hoped that it may create many jobs, fulfilling the demand in the country.

“Clearly India faces a challenge in terms of providing sufficient employment for a number of people looking for work and particularly young people. But yes, the measures and the reforms that India is undertaking will over medium term create jobs,” International Monetary Fund official spokesperson, Gerry Rice said.

The agency also noted the fact that India is one among the fastest growing large economies in recent times and said that  some of the initiatives have led to improvement in reduction of poverty rate and changed living standards.

“Our view is that recent reforms, particularly the implementation of GST, national goods and services tax, should help boost efficiency and productivity and overtime will contribute to help them create jobs in the formal sector,” Mr Rice said when questioned over the issue of India experiencing jobless growth.

The government has recently taken some steps to create flexibility in the labor market after it modified some labor rules. “We think that these reforms will help to increase employment, perhaps not overnight but over the medium term,” he added.

Mr Rice commented over micro economic policies, structural forms taken up by Indian Government which includes the reforms in the labor market. He hoped that these reforms will help India to boost its long-term growth and will create new jobs too.

“So we think, all of this will help to spur India’s continuing catch up with advanced economies and create many jobs that are needed to employ people who are going to labor force,” Mr Rice added.

According to Union Ministry for Labour and Employment, the unemployment rate in India is around 3.7 per cent for the year 2015-16. The data given is based on UPSS (usual principal subsidiary status) approach that needs only 30 days of work in the whole year for a person to be called as employed. A total of seventy-seven percent of the families as per the reports have no such member in the house, who can be called as a regular wage earner. And many families of about 67 percent have income less than Rupees 10,000 per month.

The Government of India has taken crucial steps in this regard to decrease the unemployment rates. For Example, Mahatma Gandhi National Rural Employment Guarantee Scheme was launched by the government with the guarantee of 100 day employment to any unemployed person in a year. The same was implemented in more than 200 districts and will be expanded to about 600 districts. The Government is trying to reduce unemployment very soon.

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